Crypto-powered food & beverages
Exploring the value of crypto for consumer brands and their customers
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An interesting use case of crypto I’ve been exploring, is how it can change the relationships between consumer brands and their customers. To do this, I’ve had a look at a few food & beverage brands experimenting with crypto; Taika, Bored Breakfast Club and OffLimits. It’s still early days but I’ll take you through what they’ve done so far, so that we can get a peek into what consumer brands may look like in the future.
Taika
Taika creates ready-to-drink, adaptogen-infused beverages, like this black coffee or oat milk latte. Their drinks are designed to take away the jitters and anxiety that people may feel after having caffeine.
Currently, Taika is collaborating with Friends With Benefits (FWB) to co-create a club-mate flavour. For context, FWB is decentralised autonomous organisation (DAO) - or in simpler terms, it’s an internet community with a shared bank account (source: DAO Landscape by Coopahtroopa).
FWB members need to apply to join and also need to hold a certain amount of $FWB tokens. Together, they work on pushing the boundaries of what’s possible using web3 tools. For more on FWB, check out this short explainer or read about why a16z invested in them.
Here’s how their partnership works:
Taika leverages their existing know-how to develop and produce the new flavour, while FWB members work with Taika on design and marketing
FWB members can get involved in the project in two ways. Firstly, they can apply to join a paid working group to create design and marketing material. Alternatively, they can volunteer to join a focus group to do product tastings and vote on decisions, like what designs to use, or which version of the drink to launch to the public.
Profits from sales of the product will be shared between Taika and FWB, with FWB entitled to 18%. This creates an alignment of incentives where FWB members are financially incentivised to help Taika create the best product, and sell more of it.
You can also read the full details of their partnership here, and see how FWB members voted on the proposal to start this partnership.
Arguably, this arrangement would’ve been possible without crypto - so where does crypto fit in?
Open data in crypto makes it easy to verify an individual’s holdings, whether they’re fungible tokens (like the $FWB token) or non-fungible tokens (NFTs). This creates efficiencies for brands looking to collaborate with existing communities, as it’s possible to define eligibility criteria for exclusive events/perks based on an individual’s token holdings. In this case, the opportunity limited to FWB members.
It’s not hard to imagine that a successful partnership with Taika could lead to more brand partnerships in the future. The possible downstream impacts of that are more ongoing revenues for the FWB community and more opportunities for members to engage in paid work or unique opportunities. This would make it more desirable to be a part of $FWB, increasing the $FWB token value with greater demand, which financially benefits existing holders. This means FWB members are incentivised to help this partnership succeed - which, to Taika’s benefit, could make them advocates of their brand and products.
Bored Breakfast Club
Bored Breakfast Club is an NFT project which has partnered with Yes Plz Coffee to create and sell packs of coffee beans.
Holders of the NFT are entitled to perks like discounts, and a free shipment of every new blend. In this case, the NFT acts as a verifiable digital subscription to the Bored Breakfast Club.
The way the subscription service works is that there's a "Community Coffee Wallet" which collects a portion of revenue from: NFT sales on the secondary market, product sales, and merch sales. This wallet funds the cost of producing and delivering a new blend to all NFT holders. When it's fully funded, NFT holders are able to make a free claim for the coffee.
This means holders of the NFT are incentivised to help the brand scale and succeed. More sales means the Community Coffee Wallet is funded faster, which entitles holders to more and more free coffee. A model like this may have been possible without crypto (e.g. as a benefit of a paid membership), but crypto makes it more efficient. Brands can easily verify ownership of their NFTs and limit perks to holders.
The unique value of crypto here is in tokenising the digital subscription in the form of an NFT, making it tradable on the secondary market. This means holders (and particularly early adopters) can profit from the success of the brand. For example, if the brand scales and begins shipping free coffee at a faster rate, the value of the NFT would likely increase too, given there’s more value being provided. Similar to Taika, crypto creates a stronger alignment of incentives between customer and brand.
It’s also worth nothing that additional perks can also be added at any time, given the NFT simply acts as a link between customers and the creators of Bored Breakfast Club.
OffLimits
OffLimits is a cereal brand by Emily Elyse Miller trying to make cereal fun and flavoursome, without any artificial ingredients.
They've begun experimenting with crypto in a few ways:
At the Art Basel art fair in December 2021, attendees who scanned a QR code were able to claim an "NFT cereal toy" with an animated version of their Spark cereal flavour. Some received an “exploding cereal” NFT which they could redeem for a variety 4-pack and some merch.
Soon, OffLimits will be launching The Best Cereal in the Metaverse, a collection of 2500 NFTs. NFT holders will get to collaboratively design a cereal box by submitting and voting on artworks that’ll be included as a collage on the box, and also voting on the final design. Once the design process is complete, holders will be shipped 4 boxes of the cereal with the final design.
Finally, OffLimits are partnering with gmgn supply co. They’re a DAO (decentralised autonomous organisation) looking to launch 100 community-based consumer packaged goods (CPG) brands, starting with a cereal brand called gm Cereal. The vision is to become community-driven version of Nestlé or Unilever. If it works - members will be able to vote on big decision like what products will be developed, earn a portion of revenue from product sales, and get paid for their contributions to the brands / organisation. Similar to Taika, partnerships like this allows OffLimits to align incentives with existing communities, and turn them into super-fans and brand advocates.
In many ways, NFTs align well with the OffLimits brand - it allows them to create unique, fun and gamified customer experiences to foster greater customer loyalty.
For example, what if OffLimits created NFT “cereal toys” of every flavour, which you could collect by scanning the QR code inside each box? There could be benefits of collecting multiples or certain combinations, to redeem for different perks. Remember, NFTs are simply a link between the creators and the holders, so brands have endless opportunities to leverage that link to engage and reward their customers.
Closing Thoughts
In doing this research, my goal was to understand the value of crypto for consumer brands and their customers, if any.
The examples of Taika, Bored Breakfast Club and OffLimits have shown that brands can leverage the technology to improve customer acquisition and retention, and deliver deeper value to token holders. There’s upside for customers too, as they have more opportunities to co-create with brands, and in some cases, profit from their early support; creating an incentive to help brands succeed.
Overall, crypto looks like a new tool in the toolkit for brands - letting them build their communities, improve customer engagement in more efficient and creative ways, and align their incentives with their customers.
Do you have any other thoughts? I’d love to hear about it!
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